New York Marijuana Distribution License

Does New York Require a License to Distribute Marijuana and Marijuana Products?

Yes, the New York Marijuana Regulation and Taxation Act (MRTA) requires cannabis establishments intending to distribute cannabis in the state to obtain distribution licenses. The cannabis license that allows for this in New York is the Adult-Use Distribution License.

In New York, a "Distributor" is defined as anybody who sells cannabis products for which a license is required, at wholesale. "Wholesale" refers to soliciting or receiving an order for, retaining or exposing for sale, and retaining with intent to sell, made by any licensed entity, whether principal, owner, agent, or employee, of any adult-use, medical-use, or cannabis product for resale purposes.

No person is permitted to own more than one distributor license.

What Distribution Activities are Covered by New York Marijuana Distribution License?

The Adult-Use Distribution License permits the purchase, possession, distribution, and sale of cannabis from the licensed premises of a licensed adult-use grower, processor, small business adult-use cooperative, or microbusiness licensed to sell adult-use cannabis to properly licensed retail dispensaries, on-site consumption sites, and adult-use delivery licensees.

Does New York Offer Transport-Only Distributor License?

Besides the adult-use distributor licenses, New York also issues another type of license that permits holders to distribute cannabis. The Registered Organization Adult-Use Cultivator, Processor, Distributor, Retail Dispensary License has the same authorization and conditions as an adult-use cultivator, adult-use processor, adult-use distributor, and adult-use retail dispensary licenses. However, adult-use cannabis sales and cannabis products cultivated, processed, or distributed by such organizations are limited to the organizations’ adult-use retail dispensaries.

For such registered organizations, the locations of their adult-use dispensaries are limited to the organizations' medical dispensaries' premises and facilities.

How to Get Marijuana Distribution License in New York

The Office of Cannabis Management (OCM), a newly formed body under the MRTA, will grant cannabis distribution licenses. Before the OCM may issue licenses, the Office must develop and adopt rules to implement the state's cannabis legislation. As a result, the processes and timelines for applying for cannabis production licenses remain unknown.

Although the OCM is not presently accepting new license applications, the MRTA already contains some criteria and standards. For example, the MRTA requires applicants to be 21 years of age or older to apply for cannabis distribution licenses. Licenses must also be renewed every two years.

Additionally, the MRTA requires the OCM to create rules establishing criteria for evaluating whether an application should be given a license, including but not limited to the following:

• The applicant may be regarded as a social and economic equity applicant.
• The applicant will be able to effectively regulate illegal cannabis trafficking.
• The applicant will comply with all applicable state laws and regulations.
• The applicant and the executives of the cannabis establishment are prepared, willing, and capable of carrying out the license-requested activities.
• The applicant possesses or has the right to utilize sufficient land, buildings, and equipment to properly perform the activity described in the application or has a plan to do so if qualifying as a social and economic justice applicant.
• The applicant meets the criteria for social and economic equality or shows a commitment to assisting communities and people who are disproportionately impacted by cannabis law enforcement.

Under the MRTA, New York adopted the idea of social and economic equity to guarantee that members of minority groups who have been disproportionately impacted by cannabis prohibition benefit from legalization. The social and economic equity program aims to help people such as minority and women-owned businesses, struggling farmers, and disabled veterans, in securing lucrative licenses. Incentives offered to persons in these categories may include the opportunity to have their application expedited; priority or exclusive access to specified licensing classes or categories; priority access to specific markets; fee reduction or delay; and access to low- or no-interest financing.

Applicants and licensees who participate in the social and economic equity program will also receive counseling, small business coaching, and compliance assistance from the state to help them start and develop a cannabis distribution business.

Additionally, applicants who have incomes less than 80% of the county's median income, have been convicted of a marijuana offense, or have a close family member who has been convicted will be given preference.

Licenses issued to applicants who qualify for social and economic equity program cannot be sold or transferred within the first three years after issuance, save with the board's prior written approval. After the three-year period has expired, a social and economic equity applicant may transfer or sell a license, provided that such intention is notified to the CCB and the licensee repays any remaining balances on Board-issued loans.

The New York MRTA recommends that a license be granted to a distribution license applicant in the public interest, considering the following criteria into consideration, but not limited to:

• That cultivating, processing, transporting, distributing, and selling marijuana for adult use are privileges, not rights
• The number and kind of cannabis licenses in the immediate area of the applicant's location and within the municipality or subdivision thereof.
• Evidence that all required licenses and permits have been acquired or will be obtained from the state and any other relevant regulatory bodies.
• The license's impact on pedestrian and vehicular traffic, as well as parking, in the area around the site
• The site's existing noise level and any extra noise generated by the planned premises
• Capacity to mitigate adverse environmental effects, such as water use, energy consumption, and carbon emissions
• The effect on the production and availability of cannabis
• Any extra-statutory or regulatory factors that are relevant in evaluating whether granting a license would benefit the public convenience and benefit, as well as the public interest of the community
• The applicant and its management executives have good moral character and do not own or control more licenses or permits than the MRTA allows.
• The applicant has entered into a labor peace agreement with a bonafide labor organization that is actively representing or trying to represent the applicant's workers, and compliance with the labor peace agreement's provisions is a significant condition of licensing. When considering applications from businesses with 25 or more workers, the OCM must give preference to applicants who are parties to collective bargaining agreements with bonafide labor organizations in New York or another state and who build their licensed facility utilizing union labor.
• The applicant will contribute to communities and people who are disproportionately impacted by cannabis law enforcement and will make these contributions public via the OCM.
• The application must satisfy any additional requirements set by the OCM; and if the applicant is a registered organization, the applicant must show the establishment's ongoing effort in producing, distributing, and/or studying medicinal cannabis in preparation for certification.

Individual candidates for cannabis production permits must have a "substantial presence" in New York, according to Section 3.1 of the MRTA. Corporations and legal entities must comply with the following requirements:

• Have their primary offices in New York
• Be incorporated (or otherwise established) under the laws of the State of New York
• Have a majority of their ownerships as residents of New York.

Pursuant to Section 62.3 of the MRTA, applicants shall be compelled to affirm under penalty of perjury that their applications are truthful. Additionally, they may anticipate being asked to supply the following:

• Race and ethnic origin information
• Ownership and investment information (including corporate structure)
• Demonstration of moral integrity (including fingerprinting)
• Information about the cannabis dispensary's location
• Financial statements

Note that certain local ordinances may apply and some approvals may be required at the county or municipal levels for a cannabis license application to be successful. The ordinances and approvals vary per the proposed location of the cannabis establishment. Hence, it is recommended that you research the specific regulations, permits, and approvals applicable to your locality before submitting your application to the OCM.

Per Section 76 of the MRTA, a cannabis license applicant in New York is required to inform the municipality in which the cannabis establishment will be situated of the intention to file an application for a cannabis license. The notification must be filed with the municipal clerk, not less than 30 days nor more than 270 days prior to submitting the state licensing application. The notification must follow the Cannabis Control Board's format.

If a local government offers an opinion in favor or against issuing the registration, license, or permit application, that view becomes part of the record on which the Office of Cannabis Management bases its licensure recommendation to the Cannabis Control Board. The Cannabis Control Board will respond in writing to the municipality with an explanation of how such a view was weighed in determining whether to grant or refuse the application.

Applicants who have had their applications denied may apply to the Cannabis Control Board for a review of the decisions in a manner that will be provided by the rules of the Board. You may stay informed about the application window and timelines by regularly checking the OCM website.

How Much Does Marijuana Distribution License Cost in New York?

The cost of a New York cannabis distribution license is unknown at this time. However, as per MRTA, the cost is non-refundable and may be waived or reduced in the case of an equity application. According to Section 63.1 of the MRTA, the fee may also be determined by the volume of cannabis products moved and other factors.

Can Licensed Marijuana Distributors Also Get Other Cannabis Licenses in New York?

Adult-Use Distributor licensees are prohibited from holding retail dispensary licenses or having a direct or indirect involvement in retail dispensaries. Additionally, no direct or indirect commercial stake in any adult-use cultivator license, processor license, or registered organization is permitted.

This restriction does not prevent a registered organization from being awarded a license to sell adult-use cannabis products that it cultivates and processes to licensed adult-use retail outlets that it owns and manages. No individual may own more than one distributor license.